Lewiac Pty Ltd and Lendlease Funds Management Ltd t/as Harbour Town Premium Outlets
[2022] QCAT 278
QUEENSLAND CIVIL AND
ADMINISTRATIVE TRIBUNAL
CITATION:
Lewiac Pty Ltd and Lendlease Funds Management Ltd t/as Harbour Town Premium Outlets [2022] QCAT 278
PARTIES:
LEWIAC PTY LTD AND LENDLEASE FUNDS MANAGEMENT LTD T/AS HARBOUR TOWN PREMIUM OUTLETS (applicant)
v
STAR COFFEE COMPANY PTY LTD (respondent)
APPLICATION NO/S:
RSL010-21
MATTER TYPE:
Retail shop leases matter
DELIVERED ON:
21 July 2022
HEARING DATE:
25 February 2022
HEARD AT:
Brisbane
DECISION OF:
Presiding Member Lee
Member McBryde
Member JudgeORDERS:
1. That the rent for the response period and the extension period is to be calculated by reference to the Respondent’s turnover;
2. That on the basis that the Respondent’s reduction in turnover for the response period is 40%, the rent payable by the Respondent for the response period is $77,812.00, with $25,937.34 (20%) waived, and $25,937.34 (20%) deferred and amortised into equal monthly instalments over a period of 2 years commencing on 1 October 2020;
3. That of the $25,937.34 deferred for the response period, the sum of $18,372.24 is presently due and payable;
4. That of the $25,937.34 rent deferred for the response period, the sum of $7,565.10 remains deferred and is to be paid to the Applicant in equal monthly instalments of $1,080.72 commencing on 1 March 2022;
5. That on the basis that the Respondent’s reduction in turnover for the extension period is 20%, the rent payable by the Respondent for the extension period is $51,553.41, with $12,888.35 deferred and amortised into equal monthly instalments over period of 2 years commencing on 1 January 2021;
6. That of the $12,888.35 rent deferred for the extension period, the sum of $7,518.14 is presently due and payable;
7. That of the $12,888.35 rent deferred for the extension period, the sum of $5,370.21 remains deferred and is to be paid to the Applicant in equal monthly instalments of $537.01 commencing on 1 March 2022; and
8. That an account be done of the rental adjustments set out in subparagraphs 2 to 7 above, so as to ensure that the Respondent only pays any outstanding amounts that are presently due and payable to the Applicant.
LANDLORD AND TENNANT- RETAIL AND COMMERCIAL TENNANCIES LEGISLATION- dispute between lessor and lessee in a retail shop lease about rent payable- method of calculation of rent payable under the State Government’s COVID-19 Emergency Response Regulation.
COVID-19 Emergency Response Act 2020 (Qld)
National Cabinet Mandatory Code of Conduct-SME Commercial Leasing Principles
Retail Shop Leases Act 1994 (Qld), s 23
Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020 (Qld), s 10, s 14, s 15, s 16, s 17, s 18 and s 43(3)(c)
Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Amendment Regulation 2020 (Qld)Queensland Civil and Administrative Tribunal Act 2009 (Qld)
Cubillo v Commonwealth of Australia (No 2) (2000) 174 ALR 97
Jones v Dunkel (1959) 101 CLR 298
Nuhic v Rail & Road Excavations Pty Ltd [1972] 1 NSWLR 204Sneakerboy Retail Pty Ltd trading as Sneakerboy v Georges Properties Pty Ltd (No 2) [2020] NSWSC 1141
APPEARANCES & REPRESENTATION:
Applicant:
Mr Gregory Day, Centre Manager of the Applicant
Respondent:
Mr Christopher Hannay, Director of the Respondent
REASONS FOR DECISION
Introduction
These proceedings arise out of the failure of the parties to agree on the rent payable by the Respondent to the Applicant during the ‘response period’ and the ‘extension period’ (collectively referred to in these reasons as the prescribed periods) pursuant to sections 14 and 15 of the Retail Shop Leases and Other Commercial Leases(COVID-19 Emergency Response) Regulation 2020 (Qld) (‘the Regulation’).
The parties have engaged in negotiations and exchanged offers between June 2020 and January 2021[1] and participated in a mediation on 1 December 2020.[2]
[1]Annexure A to Notice of Dispute dated 14 January 2021(exhibit 3): Main Points of Dispute, and Affidavit of Gregory Lee Day affirmed 20 August 2021 at [7], [21]-[27] (exhibit 1).
[2]Appointed through the Queensland Small Business Commissioner following the giving of a dispute notice pursuant to section 26 of the Regulation; annexed to the Notice of Dispute filed 14 January 2021 (exhibit 3) and Affidavit of Gregory Lee Day affirmed 20 August 202 at [25]-[26].
Orders are now sought from the Tribunal to determine the amount of rent payable under the Regulation for the prescribed periods having regard to the matters set out at sections 15(2), 16, 17 and 18 of the Regulation together with the good faith leasing principles set out in the National Cabinet Mandatory Code of Conduct-SME Commercial Leasing Principles During COVID-19 (‘Code’).[3]
[3]Statement of Agreed Facts at [27] (exhibit 2).
The Respondent also seeks orders in respect of rent payable beyond the prescribed periods for a reasonable recovery period, on the basis that the effects of the COVID-19 emergency did not end on 31 December 2020.
A large volume of material has been filed by the parties and tendered as exhibits at the hearing.[4] In these reasons, we will refer to key aspects of the material where relevant.
[4]Exhibits 1-9, including 6 Affidavits on behalf of the Applicant and Respondent.
We acknowledge the helpful submissions prepared on behalf of the parties responsive to our directions of 22 February 2022.[5]
[5]Submissions filed 4, 11 and 18 March 2022.
Background and Legal Framework
It is useful to provide the context in which the issues under dispute in these proceedings arise.
On 11 March 2020, the World Health Organisation declared a global pandemic and public health crisis due to the coronavirus.[6]
[6]World Health Organisation Coronavirus Disease 2019 (COVID-19): Situation Report 100. Geneva (2020).
The impact of the coronavirus was unprecedented, with catastrophic consequences affecting millions of lives across the globe. All sectors were impacted and insofar as relevant here, the global economy and financial markets which were associated with reduced income, business disruption and closure, increased unemployment, disruptions to transport, service and manufacturing industries and decimation of the tourist industry.
On 29 March 2020, the Prime Minister of Australia announced that work had begun on a short-term intervention for commercial tenancies and that National Cabinet had agreed to a moratorium on evictions over the next 6-month period for non-payment of rent to be applied across commercial tenancies impacted by severe rental distress due to the coronavirus.
On 3 April 2020, National Cabinet agreed that States and Territories would implement a mandatory code of conduct, including legislation and regulation for the purpose of imposing a set of good faith leasing principles for application to commercial leases in response to financial hardship being experienced by some tenants due to business disruption, closures, restrictions on movement and social distancing due to the COVID-19 emergency. It was envisaged that the code would apply where the tenant is eligible for the Commonwealth’s JobKeeper assistance and is a small-medium sized enterprise with up to $50 million in annual turnover.
On 7 April 2020, the Prime Minister announced that National Cabinet had agreed on a Code, to be given effect through legislation and regulation.
On 23 April 2020, the COVID-19 Emergency Response Act 2020 (Qld) (‘the Act’) received assent which provided for Regulations to implement the good faith leasing principles, as set out in the Code for ‘affected leases’ in Queensland.[7]
[7]Section 23 of the Retail Shop Leases Act 1994 (Qld) and implemented by the objectives of the Regulation in section 3, Statement of Agreed Facts at [13] (exhibit 2).
The Regulation, as amended by the Retail Shop Leases and Other CommercialLeases (COVID-19 Emergency Response) Amendment Regulation 2021 (Qld) (‘Amendment Regulation’), requires landlords and tenants, if requested by either of them to the other, to negotiate a reduction in the amount of rent payable during the ‘response period’ and ‘extension period’ prescribed by the Regulation.[8]
[8]Sections 14 and 15 of the Regulation, Statement of Agreed Facts at [12] (exhibit 2).
The aim of the Regulation was for lessors and lessees to share the burden of the economic fallout from the impact of COVID-19.[9]
[9]Explanatory Memorandum for the Regulation.
Being a retail shop lease[10] with the Respondent’s annual turnover being less than $50 million, the subject lease is an ‘affected lease’.[11]
[10]As defined in section 5A of the Act.
[11]Section 5 of the Regulation, Statement of Agreed Facts at [18] (exhibit 2).
The process by which the parties to an affected lease must negotiate the rent payable during the response period and/or extension period, if requested to do so by one of the parties to the lease, is provided for in the Regulation.[12] That process is a framework which provides flexibility for lessors and lessees to reach an agreement which best suit the particular circumstances.
[12]Part 2, Division 3 of the Regulation, Statement of Agreed Facts at [19] (exhibit 2).
In this process, both lessors and lessees must cooperate, act reasonably and negotiate in good faith, which underpins the core objective of the Regulation of providing relief from financial hardship.[13]
[13]Section 11 of the Regulation.
The calculation of the rent payable under the lease during the prescribed periods is set out in section 15 of the Regulation, as amended by the Amendment Regulation. The Regulation is to be read in conjunction with the Code,[14] which prescribes the minimum requirements for an offer of reduced rent during the prescribed periods where an offer is made in accordance with the Regulation, including that an offer must:
(a)Relate to any or all of the rent payable under the affected lease during the prescribed periods;
(b)To the extent the request relates to the response period, provide for no less than 50% of the rent reduction offered to be in the form of a waiver of rent; and
(c)Have regard to various matters set out in section 15(2)(c) of the Regulation (see below).
[14]Section 3(a) of the Regulation.
Section 10 of the Regulation specifies that rent reduction offered during the extension period is by way of deferral of rent. This section provides for the parties to negotiate and enter into an agreement that is inconsistent with and outside of the Regulation and the Code.
The Act provides that regulations made under section 23 of the Act expire 2 years after the expiry day, unless sooner repealed. The Regulation has not been repealed.[15]
[15]The expiry day is defined in the Act (as amended by the Amendment Regulation), as the earlier of 30 April 2022 or another day prescribed by regulation as the expiry day, Statement of Agreed Facts at [15]-[16] (exhibit 2).
Pursuant to sections 42(1) (a)-(c), 41(1)(b) (i) and (c) of the Regulation, the Tribunal has jurisdiction to hear and decide an eligible lease dispute where the parties have been unable to reach a settlement agreement and the dispute is not otherwise excluded from the Tribunal’s jurisdiction by the Regulation.[16]
[16]Statement of Agreed Facts at [29]-[35] (exhibit 2).
Facts
The parties have agreed on material facts,[17] narrowing the issues in dispute. Relevantly:
[17]Ibid.
(a)The Respondent leases premises from the Applicant located at Harbour Town Shopping Centre (‘the premises’) on the Gold Coast in the State of Queensland, pursuant to a lease dated 5 May 2015 (‘the lease’);
(b)The Respondent operates a coffee lounge and café from the premises;
(c)The lease between the parties commenced on 14 December 2014 and expired on 13 December 2021;[18]
[18]The foundation lease dated 5 May 2015 is annexed to the Notice of Dispute filed 14 January 2021 (exhibit 3).
(d)The rent payable under the lease between 14 December 2019 and 13 December 2020 is $23,398.50 (inclusive of GST) per month;
(e)The rent payable under the lease between 14 December 2020 and 13 December 2021 is $24,568.40 (inclusive of GST) per month;
(f)The Respondent currently remains in the premises on a monthly tenancy in accordance with the terms of the lease;
(g)The ‘response period’ prescribed by the Regulation is the period between 29 March 2020 to 30 September 2020, and the rent payable by the Respondent during that period (prior to any abatement or reduction) was $23,398.50 per month (inclusive of GST);
(h)The ‘extension period’ prescribed by the Regulation is the period between 1 October 2020 to 31 December 2020 (sic), and the rent payable by the Respondent during that period (prior to any abatement or reduction) was $23,398.50 per month (inclusive of GST);
(i)The Respondent suffered an average total decline in turnover during the ‘response period’ of approximately 44%;
(j)The Respondent suffered an average total decline in turnover during the ‘extension period’ of approximately 20%;
(k)The Respondent held a valid lease with the Applicant during the prescribed periods, and is entitled to the benefit of the operation of the Regulation;
(l)The activity statements of the Respondent indicate that the annual turnover of the Respondent does not exceed $50 million dollars;
(m)The parties acknowledge there are two methods by which landlords and tenants can negotiate the amount of rent payable during the prescribed periods, by sections 10 or 15 of the Regulation;
(n)An agreed account reconciliation of arrears for the Respondent’s tenancy for the period 1 March 2020 to 31 December 2020 is set out in Annexure A; the total amount invoiced being $273,150.78 (GST inclusive), (of which $234,675.45 was rent) less payments received of $132,977.93 (of which $100,613.55 was rent), leaving the amount owing of $140,172.85 (of which $134,061.90 was rent); and
(o)An agreed account reconciliation of arrears for the Respondent’s tenancy for the period 1 January 2021 to 31 August 2021 is set out in Annexure B; the total amount invoiced being $231,988.21 (GST inclusive), (of which $196,547.36 was rent) less payments received of $231,988.21 (of which $196,547.36 was rent), leaving the amount owning of $ nil.
Claim
The Applicant’s calculations of the waiver and deferral amounts previously offered to the Respondent for the prescribed periods are set out in Annexure B to its Notice of Dispute.[19] They are said to be based upon financial material supplied by the Respondent[20] and demonstrate:
(a)For each month during the prescribed periods, the Applicant compared sales or turnover for the period for which rent reduction is sought, compared to sales or turnover for the corresponding period the year before, that is 2019;[21]
(b)The Applicant offered a percentage deferral and waiver of rent for every month of the ‘response period’, tailored to the loss in turnover actually suffered by the Respondent in each month during that period; and
(c)The Applicant offered a percentage deferral of rent for every month of the ‘extension period’, tailored to the loss in turnover actually suffered by the Respondent in each month during that period.
[19]Annexure B to Notice of Dispute filed 14 January 2021(exhibit 3).
[20]Affidavit of Gregory Lee Day affirmed 20 August 2021 at [20] (exhibit 1).
[21]Ibid at [13].
The Applicant says that its above approach in sales comparison is reasonable, having regard to the objective of the Code to ensure parties, ‘share, in a proportionate, measured manner, the financial risk and cashflow impact during the COVID-19 period, whilst seeking to appropriately balance the interests of tenants and landlords’.[22]
[22]Ibid at [14].
On this basis, the calculations in Annexure B are as follows:
(a)The full amount of rent payable before waiver or deferral is $191,850.00 plus GST;
(b)The waiver amount is $29,779.59 plus GST; and
(c)The deferral amount is $42,390.84 plus GST.
The Respondent’s rent arrears for the prescribed periods are set out in Annexure C to the Notice of Dispute. As at 14 January 2021, the Applicant says the arrears owed by the Respondent amount to $140,172.85 plus GST; of which $134,061.90 comprises rent.[23]
[23]Paragraph 18 of Main Points of Dispute, annexure A to Notice to Dispute (exhibit 3).
Consequently, the Applicant says the Respondent’s adjusted arrears for the prescribed periods total $60,785.38, with the sum of $46,629.92 plus GST for the deferral amount pursuant to section 17 of the Regulation.
In support of the approach taken, the Applicant points to the mediation conducted between the parties and the Queensland Small Business Commissioner in December 2020, in which it was observed that having regard to offers made by the Applicant during the course of negotiations:
In applying the Regulation to the letter, if the reported sales and decline in turnover [of the Respondent] are an accurate representation…the lessor’s offer appears to be quite fair, reasonable, and above the requirements of the Regulation (emphasis added).[24]
[24]Affidavit of Gregory Lee Day affirmed 20 August 2021, paragraphs [16]-[18]; exhibit ‘GD-1’, pp 76-79 (exhibit 1).
During the course of negotiations, the Applicant says it made offers[25] to the Respondent in excess of what was required under the Regulation, by the application of the formula and considering each of the Respondent’s individual circumstances in accordance with the requirements of section 15 of the Regulation, namely that it:
(a)Related to any or all of the rent payable under the affected lease during the response period;
(b)Provided for no less than 50% of the rent reduction offered to be in the form of waiver of rent; and
(c)Had regard to the requirements of section 15(2) of the Regulation.[26]
[25]Ibid at [20]- [27].
[26]Ibid at [18]-[19].
Section 15(2)(c) of the Regulation requires the parties to have regard to various matters when negotiating rent payable under the affected lease, namely:
(a)All of the circumstances of the lessee and the affected lease, including the reduction in turnover of the business carried on at the leased premises during the response period or extension period;
(b)The extent to which a failure to reduce the rent payable under the lease would compromise the lessee’s ability to comply with the lessee’s obligations under the lease, including the payment of rent;
(c)The lessor’s financial position, including any financial relief provided to the lessor as a COVID-19 response measure; and
(d)If a portion of rent or another amount payable under the lease represents an amount for land tax, local government rates, statutory charges, insurance premiums or other outgoings, any reduction in, or waiver of, the amount payable.
The Applicant says it has had regard to all these matters, as follows:
(a)For each month during the prescribed periods, the Applicant received notification of the Respondent’s turnover for the months April 2020 to December 2020, following which the Applicant compared the Respondent’s turnover to the corresponding period the preceding year to calculate the reduction in turnover pursuant to the Regulation and applying the formula. The offers made were in excess of the requirements of the Regulation.[27]
(b)It did not consider that the Regulation was intended to require a full abatement of rent where a tenant became unable to pay rent under a lease and that the formula adopted was a reasonable method of considering the Respondent’s ability to pay rent and implementing the objectives of the Code. The Applicant considered that the Respondent’s request for 100% relief was unreasonable, disproportionate to the loss in turnover suffered by the tenant and inconsistent with the guidance given by the Queensland Small Business Commissioner.[28]
(c)Because of negotiations with tenants in the premises, it has suffered a marked reduction in cash flow as the primary form of income from the premises is payment of rent.[29] The Applicant has not received any government assistance which could be passed on to the Respondent[30] and it had advised the Respondent that there was ‘little to no room to move on the COVID $ as [the Applicant had] already extended itself in order to resolve [the dispute]’.[31]
[27]Ibid at [20]- [27].
[28]Affidavit of Gregory Lee Day affirmed 20 August 2021 at [32]-[37] (exhibit 1).
[29]Ibid at [29].
[30]Ibid at [30].
[31]Ibid at [31].
The considerations taken into account by the Applicant include:
(a)The employment of Mr Jack Waters as a COVID management person;[32]
(b)Capital contributions made by Mr Hannay;[33]
(c)Leasing timing and negotiations.[34]
[32]Ibid at [38] -[42].
[33]Ibid at [43]-[46].
[34]Ibid at [47]-[51].
In relation to the additional circumstances raised by the Respondent (see below) as having allegedly been neglected by the Applicant in its calculations, the Applicant says it:
(a)Does not justify an award of further rent relief because they do not give effect to the Code in a manner that is proportionate, measured, appropriate and/or relevant; and/or
(b)Is otherwise already taken into account by the Applicant by reference to the Respondent’s turnover and the method which has been relied upon by the Applicant in calculating the quantum of relief already offered to the Respondent.
The Applicant has subsequently sought to amend the claim articulated in the Notice of Dispute pursuant to sections 44(3)(b)[35] and 44(3)(c)[36] of the Regulation and seeks the following orders:
[35]An order requiring a party to the dispute to pay an amount, including an amount of compensation, to a stated person.
[36]An order about the amount of rent payable for the response period or extension period or how rent is to be worked out, including, for example, by reference to the turnover of the lessee’s business.
(a)That the rent for the prescribed periods is to be calculated by reference to the Respondent’s turnover;
(b)That on the basis that the Respondent’s reduction in turnover for the response period is 40%, the rent payable by the Respondent for the response period is $77,812.00, with $25,937.34 (20%) waived, and $25,937.34 (20%) deferred and amortised[37] into equal monthly instalments over a period of 2 years commencing on 1 October 2020;
(c)That of the $25,937.34 deferred for the response period, the sum of $18,372.24 is presently due and payable;
(d)That of the $25,937.34 rent deferred for the response period, the sum of $7,565.10 remains deferred and is to be paid to the Applicant in equal monthly instalments of $1,080.72 commencing on 1 March 2022;
(e)That on the basis that the Respondent’s reduction in turnover for the extension period is 20%, the rent payable by the Respondent for the extension period is $51,553.41, with $12,888.35 deferred and amortised into equal monthly instalments over period of 2 years commencing on 1 January 2021;
(f)That of the $12,888.35 rent deferred for the extension period, the sum of $7,518.14 is presently due and payable;
(g)That of the $12,888.35 rent deferred for the extension period, the sum of $5,370.21 remains deferred and is to be paid to the Applicant in equal monthly instalments of $537.01 commencing on 1 March 2022;
(h)That an account be done of the rental adjustments set out in subparagraphs (b) to (g) above, so as to ensure that the Respondent only pays any outstanding amounts that are presently due and payable to the Applicant;[38] and
(i)Such further orders as the Tribunal deems just to resolve the dispute.[39]
[37]Deferred rent to be amortised over a period of at least 2 years but no more than 3 years: section 17(2)(b) of the Regulation.
[38]On the basis that since the proceedings commenced, the Respondent has made some payments to the Applicant that needs to be accounted for.
[39]Applicant’s submissions dated 4 March 2022.
Ultimately, the Applicant seeks the above orders pursuant to section 44(3)(c) of the Regulation about the amount of rent payable for the prescribed periods because:
(a)In the absence of a prescribed calculation method in the Regulation, case law or legal authority, the Applicant relies upon and adopts the guidance from the Code and the Queensland Small Business Commissioner. Consequently, the Applicant considers it is reasonable and appropriate to offer the rent reduction in proportion to the loss of turnover the Respondent had experienced for the months to which the Regulation applied compared to the Respondent’s sales or turnover for the corresponding period the year before. The Applicant then considers whether there are any additional circumstances under section 15 of the Regulation which would justify the grant of further relief. Such an approach is consistent with the objective of the Code to share in a proportionate manner the risk and cash flow impact suffered by both the Applicant and the Respondent;[40]
(b)The additional circumstances raised by the Respondent (see below) do not justify the grant of further relief and, in any case, are already wholly taken into account by, and otherwise weigh against, further relief under the methods so prescribed;
(c)The relief sought by the Applicant in this proceeding sees the Applicant and the Respondent sharing in a proportionate, measured manner, the financial risk and cashflow impact during COVID-19, whilst appropriately balancing the interests of tenants and landlords; and
(d)The relief sought by the Applicant sees just relief being granted for the prescribed periods, which are the only periods to which the Regulation applies.
[40]Affidavit of Gregory Lee Day affirmed 20 August 2021 at [12]-[15] (exhibit 1).
The Applicant says that out of more than 200 tenants in the premises, it has successfully negotiated rent relief to the majority of tenants who sought to engage in negotiations under the Regulations.[41]
[41]Affidavit of Gregory Lee Day affirmed 20 August 2021at [6] and [10] (exhibit 1).
Response and/or Counterclaim
The Respondent says that the Applicant’s approach to the application of the Regulation is narrow and an ill-conceived endeavour to escape its statutory obligations under the Regulation, following the effects of the COVID-19 emergency. In summary, the Respondent says the Applicant has not offered sufficient relief and is not ‘sharing the pain’.
The Respondent:
(a)Disputes the claim calculation made by the Applicant and says the latter took into account irrelevant considerations without proper regard to the Regulation;[42]
(b)Says that the Applicant did not have proper regard to various other considerations (see below), in the calculations detailed in Annexure B to the Notice of Dispute;
(c)Says that the rent payable under the extension period should be the same rent that has been negotiated for the response period, on the ground of consistency; and
(d)Says that the Applicant’s interpretation of the Regulation is wrong and that the rent reduction should be 40% across both the response period and extension period.[43]
[42]Response and Counter Application filed on 30 July 2021 (exhibit 4).
[43]Now obsolete given the Statement of Agreed Facts at [36]- [37] (exhibit 2).
The Respondent also says that there is an additional period beyond the prescribed periods to which the Regulation applies (said to be described under the Code as a reasonable recovery period), in respect of which the Applicant does not recognise, having regard to the following:
(a)The COVID-19 emergency did not end on 31 December 2020;
(b)The Commonwealth JobKeeper subsidy program completed on 31 March 2021;[44]
[44]Affidavit of Christopher Charles Hannay sworn 17 September 2021 at [84] (exhibit 5).
(c)During January 2021 to August 2021, the Respondent suffered an average total decline in turnover of approximately 27%, compared to January 2019 to August 2019;[45]
[45]Affidavit of Ian McKinnon sworn 16 September 2021, annexure 3 (exhibit 9).
(d)The loss in turnover suffered by the Respondent for the period 1 September 2021 to 31 January 2022 was 31%;[46]
[46]Affidavit of Christopher Charles Hannay sworn 18 February 2022 at [5] (exhibit 6).
(e)The turnover of the Respondent in the months of September 2021, October 2021, November 2021, December 2021 and January 2022 were adversely affected by the COVID-19 emergency and the variant virus Delta and Omicron;[47]
(f)The Respondent was required to implement plans that cover COVID-19 risks for the health and safety of its staff and customers and that those restrictions were in place at a genuine cost to the Respondent;
(g)The plans that cover COVID-19 risks for the health and safety of its staff and customers were implemented by the Respondent up to and including the end of January 2022;
(h)The Respondent suffered a loss of seating[48] both internally and outside the shop to comply with COVID-19 risks for the health and safety of its staff and customers during the prescribed periods and up to 31 January 2022; and
(i)The Respondent, like all businesses during the COVID-19 pandemic was required to:
(i) Encourage at least 1.5 metres space between staff and customers, and between individual customers or groups;
(ii) Maintain good hand and respiratory hygiene;
(iii) Conduct regular cleaning and disinfection;
(iv) Send unwell staff home immediately if they show any symptoms of acute respiratory disease, and get tested; and
(v) Comply with cleaning and closing mandates where infected people entered the business conducted by the Respondent.
[47]Ibid at [6].
[48]Ibid at [12]-[15],[17] and [137].
The Respondent further says that the lease expired on 13 December 2021, in circumstances where the Regulation expired on 31 December 2020, section 16 of the Regulation allows further flexibility in regard to rent negotiation if ‘a ground on which the agreement is based changes in a material way’. One such material way is said to be the lockdown of South East Queensland, and that it cannot be ignored that the Respondent is still suffering the financial effects of COVID-19 beyond the timeframes of the prescribed periods.
The evidence upon which the Respondent relies in demonstrating ‘all the circumstances of the lessee and the affected lessee’ [49] includes the following (where not otherwise specified in these reasons):
[49]Section 15(2) (c )(i) of the Regulation which specifies that regard must be had to all the circumstances of the lessee and the affected lease when negotiating rent payable.
(a)The entry ban to Australia commenced on 20 March 2020 and Health Directives prevented visitors from overseas and interstate from entering Queensland,[50] resulting in the Respondent suffering a diminution in turnover as a consequence of the effects of the COVID-19 pandemic;[51]
[50]Affidavit of Christopher Charles Hannay sworn 17 September 2021 at [54] and [59] (exhibit 5) and Affidavit of Charles Daoud sworn 17 September 2021 at [73] and [76] (exhibit 7).
[51]Affidavit of Christopher Charles Hannay sworn 17 September 2021 at [67], [70] and [88]-[91] (exhibit 5), Affidavit of Charles Daoud sworn 17 September 2021 at [10]-[16] (exhibit 7].
(b)Traditionally, a very high percentage of visitors to the premises were international;[52]
[52]Affidavit of Christopher Charles Hannay sworn 17 September 2021 at [57] (exhibit 5), Affidavit of Charles Daoud sworn 17 September 2021 at [73] (exhibit 7).
(c)In April 2020, the Applicant closed the dedicated Tourism Lounge at the premises, which remained closed as at 17 September 2021;[53]
[53]Affidavit of Christopher Charles Hannay sworn 17 September 2021 at [56] (exhibit 5), Affidavit of Charles Daoud sworn 17 September 2021 at [74] (exhibit 7).
(d)Consequently, the Respondent was subjected to a marked reduction in foot traffic at the premises;[54]
[54]Affidavit of Christopher Charles Hannay sworn 17 September 2021 at [60]-[61] (exhibit 5), Affidavit of Charles Daoud sworn 17 September 2021 at [68] and [75] (exhibit 7).
(e)The Respondent qualified and was eligible to participate in the JobKeeper Payment Scheme;[55]
[55]Affidavit of Christopher Charles Hannay sworn 17 September 2021 at [80] and [82] (exhibit 5).
(f)The Respondent was required to employ Mr Jack Waters to manage its COVID Safe Industry Plan and COVID Safe Checklist. Mr Waters was not eligible for JobKeeper payments;[56]
[56]Ibid at [129] – [130].
(g)The Respondent was paid the JobKeeper Payment which was extended from 28 September 2020 until 3 January 2021;[57]
[57]Ibid at [85].
(h)The Commonwealth Government further extended the JobKeeper payment from 4 January 2021 to 28 March 2021;[58]
[58]Ibid at [84].
(i)The Respondent was not eligible for the further extension of the JobKeeper subsidy, because the Christmas trade pushed it just above the qualifying rates;[59]
(j)It was necessary to make capital contributions;[60]
(k)Despite the absence of visitors to the premises, promotional levies were still payable under the lease in the sum of $809.26;[61]
(l)Further Health Directives resulted in shutdowns in July 2021 and August 2021, which ought also be the subject of rental adjustment in accordance with the object and intent of the Regulation;[62]
(m)Fair market rental under the lease has been assessed by a Licensed Real Estate Agent, having regard to the effects of the COVID-19 pandemic, as significantly less at $147,500.00 per annum based on $1,250.00 per square metre consistent with rentals of like premises;[63]
(n)The loss of internal and external seating for the prescribed periods and a recovery period;[64]
(o)The Applicant’s use of ‘pop up’ shops at the premises to fill space vacated by previous tenants;
(p)The costs of reduced cleaning has not been passed on to tenants, including the Respondent;
(q)The losses by way of reduction in turnover calculated by the Respondent for the 2020 and 2021 calendar years are as a consequence of COVID-19 pandemic;[65] and
(r)The Directors work 36-40 hours per week for the Respondent without drawing an income because of the effects of the COVID-19 pandemic.[66]
[59]Ibid at [86].
[60]Ibid at [134] – [136].
[61]Affidavit of Christopher Charles Hannay sworn 17 September 2021 at [73] (exhibit 5).
[62]Ibid at [142] – [152].
[63]Affidavit of Peter Beattie sworn 17 September 2021at [17] (exhibit 8).
[64]Affidavit of Christopher Charles Hannay sworn 17 September 2021 at [12]-[14],[17] and [137] (exhibit 5).
[65]Affidavit of Christopher Charles Hannay sworn 17 September 2021 and 22 February 2022 generally (exhibits 5 and 6), Affidavit of Charles Daoud sworn 17 September 2021 generally and at [43] (exhibit 7).
[66]Affidavit of Charles Daoud sworn 17 September 2021 at [59],[62] and [64].
The Respondent argues that a Jones v Dunkel[67] inference arises against the Applicant because of the following factors:
(a)The Applicant’s failure to contest the Respondent’s evidence; the content of which reflected the reality of the circumstances confronting the Respondent at the premises; and
(b)None of the Respondents witnesses were required for cross examination by the Applicant.
[67]Jones v Dunkel (1959) 101 CLR 298.
On proper construction of the Regulation and the Code, the Respondent says:
(a)The calculation of reduced rent payable during the response period ought to be beyond the mere reduction in business turnover, including expenses incurred and liabilities that exist under the lease directly attributable to the COVID-19 response measures;
(b)Consistent with section 15(2)(b) of the Regulation, no less than 50% of the rent reduction under the response period should be in the form of waiver and the remaining 50% be way of deferral;
(c)The calculation of reduced rent payable during the extension period ought to be beyond the mere reduction in business turnover, including expenses incurred and liabilities that exist under the lease directly attributable to the COVID-19 response measures; and
(d)Consistent with section 17 of the Regulation, the whole amount in the extension period should be deferred and payable over a minimum two-year period without interest.
On this basis, the orders sought by the Respondent are as follows:
(a)The total rental for the response period is $27,723.48;[68]
(b)On account of the response period an adjusted reduced rental of $4,620.58 per month (or $27,723.48 over 6 months with 50% ($13,861.74) waived pursuant to section 15(2)(b) of the Regulation, and the remaining 50% ($13,861.74) either paid immediately or deferred under section 17 of the Regulation over a period of no less than 2 years with no interest;
(c)The total rental for the extension period is $29,176.86;[69]
(d)On account of the extension period an adjusted reduced rental of $9,725.53 per month (or $29,176.386 over 3 months) with the whole of that amount deferred under section 17 of the Regulation over a period of no less than 2 years with no interest;
(e)Further or alternatively, pursuant to section 14 and 15 of the Regulation, the Respondent is entitled to a reduction of rent for the period 1 January 2021 to 28 March 2021 of 27%;
(f)Further and alternatively, pursuant to section 14 and 15 of the Regulation, the Respondent is entitled to a reduction of rent for the period 29 March 2021 to 31 August 2021 of 27%;
(g)Further and alternatively, pursuant to section 14 and 15 of the Regulation, the Respondent is entitled to a reduction of rent for the period 1 September 2021 to 31 January 2022 of 31%;
(h)An account to be done of the rental adjustments set out in subparagraphs (e), (f) and (g) above; and
(i)Such further or other orders as QCAT deems meet.
[68]Base monthly rental of $11,911.76 less $7,291.18 for COVID-19 expenses equals $4,620.58 per month.
[69]Base monthly rental of $17,016.80 less $7,291.18 for COVID-19 expenses equals $9,725.62 per month.
Finally, the Respondent says that any deferral of rent determined is to start at the time of the decision of the Tribunal, on the grounds that it is ‘absurd’ to apply it retrospectively.
Reply
In reply, the Applicant submits:
(a)The Respondent seeks an interpretation of the Regulation which is wrong;
(b)Adopting the Respondent’s interpretation would be asking the Tribunal to manifestly depart from the guidance given by National Cabinet in the Code as well as the Queensland Small Business Commissioner;
(c)A ‘reasonable recovery period’ does not as the Respondent contends, require an application of the Regulation by way of reduction in rent and consideration of circumstances beyond the prescribed periods. That interpretation does not arise from a proper interpretation of the Regulation and the Code,[70] and the purpose of the Regulation, and the Tribunal’s role in these proceedings, is to determine the amount of rent payable during the prescribed periods.
[70]In any event, the Code is in not binding.
(d)Had the legislature intended an interpretation of this nature, it would have permitted an extension beyond the prescribed periods, but it has not done so;
(e)The Respondent acknowledges that the employment of Mr Waters was voluntary but critically does not deny that that the role could have been delegated to another employee who was entitled to JobKeeper;
(f)The Respondent’s approach to the entire proceeding, that the Applicant bear 100% of the Respondent’s reduction in turnover and expenses, even if made voluntarily and avoidable, is not appropriate and proportionate such to be borne by the Applicant through rent reduction;
(g)In any event, the Applicant has considered the employment of Mr Waters as a circumstance[71] as it is required to do, and formed the view that it does not justify further rent relief having regard to the principles of the Code;
(h)The promotional levy payable by the Respondent is not a cost paid by tenants for the direct promotion of their business. It is a cost which applies more broadly to the promotion of the premises and which benefits all the tenants over financial years. It is a cost payable by tenants in consideration of receiving the benefit of the lease. Accordingly, on proper interpretation it is not an appropriate expense that is applied as a circumstance in reduction of rent calculations;
(i)The presence of pop-up shops is not a circumstance of the Respondent and the Respondent’s lease and is therefore not a consideration under section 15(2)(c) of the Regulation;
(j)Nothing in the Regulation permits an interpretation that the deferral of rent must start at the date of the Tribunal’s order[72];
(k)The Tribunal should have no regard to the alleged Jones v Dunkel inference alleged by the Respondent given:
(i) The rule does not permit the Court to infer that the uncalled evidence would have been damaging nor to fill gaps in the evidence;[73]
(ii) The uncalled evidence must not be just any evidence, it must be evidence capable of ‘putting the true complexion on the facts’;[74]
(iii) The Applicant has in fact given uncontroverted evidence from the appropriate witness, informing on the issues relevant to the Tribunal’s consideration; and
(iv) The issues raised by the Respondent are irrelevant and, in any event, it has failed to identify which witness, uncalled by the Applicant, would have some knowledge of the event or issues raised[75]; and
(l)Otherwise, repeats and relies upon its earlier submissions, contending that nothing in the Respondent’s submissions could convince the Tribunal to adopt its position and order sought.
[71]Affidavit of Gregory Lee Day affirmed 20 August 2021 at [38]-[42] (exhibit 1).
[72]Rather, the Regulation empowers the Tribunal to make orders it considers just to resolve the dispute: section 44(1).
[73]Cubillo v Commonwealth of Australia (No 2) (2000) 174 ALR 97; [2000] FCA 1084.
[74]cf Kitto J at 308: Jones v Dunkle (1959) 101 CLR 298.
[75]Nuhic v Rail & Road Excavations Pty Ltd [1972] 1 NSWLR 204 at [211].
Expert evidence
The only expert evidence tendered in these proceedings is given on behalf of the Respondent, through a report from an accredited forensic accountant specialist.[76]
[76]Affidavit of Mr Ian McKinnon sworn 16 September 2021 (exhibit 9).
In a report dated 17 September 2021, Mr McKinnon undertook an analysis based on the Respondent’s accounting records and opined as follows:
(a)The Respondent’s reduction in turnover for the period 1 April 2020 to 30 September 2020 when compared to the corresponding period 1 April 2019 to 30 September 2019, is 40%;
(b)The Respondent’s reduction in turnover for the period 1 October 2020 to 31 December 2020 when compared to the corresponding period 1 October 2019 to 31 December 2020, is 20%; and
(c)The Respondent’s reduction in turnover for the period 1 January 2021 to 30 August 2021 when compared to the corresponding period 1 January 2019 to 30 August 2019, is 27%.
In undertaking this task, Mr McKinnon was instructed to calculate the percentage change in turnover for the above periods, having regard to the Regulation and Code, without consideration of the following:
(a)The circumstances of the Respondent and lease including the reduction in turnover;
(b)The impact on the lease caused by the Respondent’s failure to pay rent;
(c)The Respondent’s financial position including any financial support it may have received; and
(d)The reduction or waiver that the Applicant may have received regarding land tax, rates, statutory charges, insurance premiums or other outgoings.
For the periods September 2021, October 2021, November 2021, December 2021 and January 2022, the Respondent contends that its turnover remains adversely affected due to the pandemic and the variant viruses.[77] No expert opinion has been tendered by the Respondent to inform the Tribunal on calculations for this period.
[77]Affidavit of Christopher Charles Hannay sworn 18 February 2022 at [5] and [6] (exhibit 6).
Consideration
The Tribunal’s role in these proceedings is confined to a determination of the amount of rent payable by the Respondent in accordance with the Regulation, having regard to the principles of the Code to ensure parties ‘share, in a proportionate, measured manner, the financial risk and cashflow impact during the COVID-19 period, whilst seeking to appropriately balance the interests of tenants and landlords’. [78]
[78]The Code.
In undertaking this task, the backdrop of the corresponding economic initiatives are relevant.
At the Commonwealth level, fiscal stimulus consisting of expenditure and revenue measures worth some $312 billion was put in place to respond to the emergent crisis; two thirds of which expired by June 2021.
Assistance given by the Commonwealth through the Regulation was aimed at assisting eligible tenancies that were suffering financial stress or hardship as a result of the COVID-19 pandemic as defined by their eligibility for the JobKeeper programme.
The JobKeeper program:
(a)Commenced on 30 March 2020 and after an extension, ended on 28 March 2021;
(b)Was only ever intended to be a temporary scheme open to businesses impacted by COVID-19;
(c)Operated by way of a wage subsidy program which dispersed some $89 billion (4.5% of the GDP) through to its conclusion;
(d)Permitted businesses to continue paying their employees, to help people stay in their jobs and restart when the crisis is over. For employees, it meant they could stay in their job and earn an income. For employers, it means they could maintain connection to their employees, to enable business to reactivate their operations quickly without having to rehire staff when the crisis is over; and
(e)Eligible employers were paid $1,500 per fortnight per eligible employee. Eligible employees would receive at a minimum, $1,500 per fortnight, before tax, and employers were able to top up the payment.
All indications are that the economy is continuing to recover with state and international borders having reopened and life slowly returning to a ‘new normal’.
As the parties have agreed on the Respondent’s turnover losses during the prescribed periods (44/20% respectively)[79] and the account reconciliation for the rent arrears for the Respondent’s tenancy for the prescribed periods and up to 31 August 2021, we now turn to a determination of the factors impacting on the calculation of rent payable by the Respondent to the Applicant.
[79]Consistent with Affidavit of Mr Ian McKinnon sworn 16 September 2021 (exhibit 9).
Having carefully considered the evidence and submissions, together with the overarching principles that underpin the provision of emergency relief and noting that there does not appear to be authority directly on point, we are persuaded by the position adopted by the Applicant and make the following findings:
(a)On proper construction and plain reading of the Code and Regulation, it is in our view appropriate to calculate the rent payable by the Respondent on the basis of the Respondent’s turnover when compared with the corresponding period the preceding year;[80]
[80]Although in the context of an artificial application of the similar NSW Covid regime to a lease that had been wrongfully forfeited, a similar approach was adopted in turnover comparison for the same period the preceding year: Sneakerboy Retail Pty Ltd t/as Sneakerboy v Georges Properties Pty Ltd(No 2) [2020] NSWSC 1141 per Robb J at [139] (Sneakerboy).
(b)Different approaches are required for calculations for the response period and the extension period. In the former, the rent reduction is offered by way of rent reduction and deferral, whereas in the latter rent reduction is offered by way of deferral only;
(c)Regarding the response period:
(i) The Applicant’s proposal is compliant with and in excess of the minimum requirementsprescribed in section 15 of the Regulation, namely that it relates to the rent payable during the response period and provides for no less than 50% of the rent reduction offered to be in the form of waiver of rent[81], after having regard to the factors set out at section 15(2)(c) of the Regulation;
[81]In Sneakerboy, Robb J also adopted an equal spilt between the proportion of rent waived and the proportion deferred, at [146].
(ii) The factors advanced by the Respondent as justifying a further rent reduction are not, in our view, additional circumstances that justify any such reduction in accordance with section 15(2)(c) of the Regulation. This includes the requirements for the Respondent to adopt measures to reduce infection control, reduction in seating, employment of Mr Waters and the injection of capital into the business. The Respondent is not unique in having to adopt measures of this nature in response to the pandemic;
(iii) The Applicant’s approach is consistent with the Queensland Small Business Commissioner’s guidance;
(iv) The Applicant’s proposal to defer the remainder is in accordance with section 17 of the Regulation, namely to the extent that the deferred rent relates to the response period, payment of the deferred rent must not be required by the Applicant until the day after the end of the response period i.e. 30 September 2020, and amortised over a period of at least 2 years but no more than 3 years, starting on the day after 30 September 2020. Given the language in section 17 has been expressed clearly, we cannot see any reasonable basis for the interpretation the Respondent urges the Tribunal to adopt in this respect; and
(v) The Applicant has not required the Respondent to pay interest or any other fee or charge in relation to the deferred rent, which is in accordance with section 17 of the Regulation.
(d)Regarding the extension period:
(i) The Applicant’s proposal is compliant with the requirements prescribed in section 15 of the Regulation, namely that it relates to the rent payable during the extension period, after having regard to the factors set out at section 15(2)(c) of the Regulation;
(ii) The factors advanced by the Respondent as justifying a further rent reduction are not, in our view, additional circumstances that justify any such reduction in accordance with section 15(2)(c) of the Regulation. This includes the requirements for the Respondent to adopt measures to reduce infection control, reduction in seating, employment of Mr Waters and the injection of capital into the business. The Respondent is not unique in having to adopt measures of this nature in response to the pandemic;
(iii) The Respondent cannot overcome clear statutory language, in the way that it urges the Tribunal to do in respect of the application of a waiver of rent payable in the extension period. The absence of provision of waiver of rent payable in this period speaks for itself. Only deferral of rent payable for this period is permitted;
(iv) The Queensland Small Business Commissioner’s views were consistent with this approach;
(v) The Applicant’s proposal to defer the rent payable is in accordance with section 17 of the Regulation, namely to the extent that the deferred rent relates to the extension period, payment of the deferred rent must not be required by the Applicant until the day after the end of the extension period i.e. 31 December 2020, and amortised over a period of at least 2 years but no more than 3 years, starting on the day after 31 December 2020. Given the language in section 17 has been expressed clearly, we cannot see any reasonable basis for the interpretation the Respondent urges the Tribunal to adopt in this respect; and
(vi) The Applicant has not required the Respondent to pay interest or any other fee or charge in relation to the deferred rent, which is in accordance with section 17 of the Regulation.
(e)Regarding a reasonable recovery period:
(i) We do not accept the Respondent’s interpretation of Section 16 of the Regulation. In our view, further rent negotiation operates in circumstances where an agreement has been reached, and where a ground upon which the agreement was based changes in a material way. Clearly, no agreement was reached in this case;
(ii) We do not accept that the reference to a reasonable recovery period in the Code operates to extend rent relief to the Respondent (in the form of waiver, deferral or both) beyond the designated prescribed periods in the Regulation. Again, we consider the language used in the Regulation is clear and demonstrative of legislative intent;
(iii) It was never the intent for relief of this nature to be given indefinitely, nor is it sustainable to do so;
(iv) Against this background, the fact the Regulation of itself has yet to be repealed is irrelevant;
(v) It is relevant that the Respondent was not eligible for the JobKeeper subsidy despite the Commonwealth Government extending it from 4 January 2021 to 28 March 2021, because the Respondent’s Christmas trade pushed it just above the qualifying rates[82]; and
(vi) For completeness, it is worth noting that a Code is by its nature, not binding.
(f)We accept that the relief sought by the Applicant in this proceeding is just and sees the Applicant and the Respondent sharing in a proportionate, measured manner, the financial risk and cashflow impact during COVID-19, whilst appropriately balancing the interests of tenants and landlords; and
(g)We make no adverse inference regarding to the alleged Jones v Dunkel inference, accepting the submissions advanced by the Applicant in this respect.
[82]Affidavit of Christopher Charles Hannay sworn 17 September 2021 at [86] (exhibit 5).
More broadly, we have formed a view as to the Respondent’s compliance with section 11 of the Regulation, regarding cooperation, acting reasonably and in good faith in all discussions and actions associated with mitigating the effect of the COVID-19 emergency on the parties to the lease and other matters to which the part applies, having regard to the following factors:
(a)The Respondent’s argument that the Supreme Court proceedings 1915/2021 have nothing to do with the rent reduction being claimed in these proceedings[83] is difficult to accept. The Supreme Court proceedings brought by the Respondent against the Applicant relates to alleged false and misleading conduct in the initial lease negotiations. The allegations include an increase in food outlets beyond the agreed additional 5 food outlets. In the Supreme Court proceedings, the Respondent says that because of the false and misleading conduct, it has suffered loss and damage because it has been unable to trade profitably by:
[83]Affidavit of Christopher Charles Hannay sworn 17 September 2021 at [186] (exhibit 5).
(i) being unable to service its obligations under the lease;
(ii) requiring the injection of further capital in order to continue trading; and
(iii) as a result of significant trading losses, claims the sum of $1,311,000.00.
A Supreme Court registry search reveals that these proceedings are in the initial stages, with a Claim and Statement of Claim being filed on 19 February 2021 (notably, after the end of the prescribed periods of the Regulation) and a Notice of Intention to Defend and Defence filed on 5 May 2021.
(b)In our view, the content and timing of the Supreme Court proceedings demonstrates the Respondent has wider concerns with the Applicant beyond its claim for rent reduction applicable in emergency response initiatives. The Supreme Court proceedings are in our view the appropriate forum for ventilation and determination of these wider issues;
(c)Like other eligible businesses, the Respondent was fortunate in that it in fact received the benefit of JobKeeper payments up until the time when its trade recovered. It is somewhat disingenuous that it seeks greater relief beyond that to which it is entitled, in circumstances where it faced no greater disadvantage than thousands of others;
(d)Within the operation of the Regulation, current fair market value as advanced by the Respondent as a circumstance to be taken into account is in our view, irrelevant. This is a matter to be negotiated in the context of ongoing lease discussions, noting that the subject lease expired on 13 December 2021 after a 7-year term, during which it was agreed there was no provision for market review update;
(e)The Respondent’s argument that the Applicant should afford it further rent relief because the Applicant placed pop-up shops in the wider premises during the affected period which impacted on its trade is again, difficult to accept. Whilst there is a paucity of evidence on this issue, it might be reasonably inferred as an attempt on the part of the Applicant to mitigate its losses, fill abandoned spaces and increase foot traffic which in turn, benefits all tenants;
(f)Equally, we do not accept the Respondent’s argument about the Applicant’s real reasons for not offering reasonable rent reductions, to artificially maintain inflated lease prices to assist in the sale process;[84]
(g)The Respondent has not explained why it was not appropriate to mitigate its losses by utilising staff who were eligible for JobKeeper payments for Mr Water’s role. Instead, the Respondent chose to employ Mr Waters who was not so eligible;[85] and
(h)Offers made by the Respondent, including the counteroffer of $57,412.00 (excluding GST) for rent payable to the Applicant for the prescribed periods, calculated on the basis of a 40/90% turnover decline less management costs and capital contributions does not in our view, ‘share the pain’ in a way that was contemplated by the Regulation.
[84]Affidavit of Christopher Charles Hannay sworn 17 September 2021 at [174]-[176] (exhibit 5).
[85]Ibid at [130].
Consequently, we find in favour of the Applicant’s interpretation of the Regulation and make orders in accordance with the orders proposed, subject of course to the necessary adjustments by reason of the effluxion of time since the orders were sought. We will leave these adjustments to the parties.
Although assisted by lawyers in preparation of their evidence and submissions, the parties represented themselves at the hearing. No orders were sought regarding costs. Consistent with section 100 of the QueenslandCivil and Administrative Tribunal Act 2009 (Qld), we make no orders as to costs.
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